TRUST & PROBATE ADMINISTRATION

When a person dies, his or her “estate” (assets including real estate, bank accounts, and other personal property) are administered through a process known as Estate Administration.

Estate Administration can vary widely from case to case, depending on the circumstances. For example, if a person’s assets were held in a Trust, the administration of those assets is usually referred to as Trust Administration and must follow the provisions of the Trust Agreement and any state laws regarding trusts. Alternatively, if the person held assets in his or her own individual name, then the administration of those assets is generally subject to the state probate laws (and if there is a Will, the administration must follow the instructions in that Will). This process, typically referred to as Probate Administration, or Probate, usually requires at least some court involvement.

Some assets (including some jointly held bank accounts, many retirement accounts, and certain insurance policies) are considered “Non-Probate Assets” and can be administered and distributed outside of the Probate process—even in the absence of a Trust. Sometimes it is not always clear whether an asset should be administered under the terms of a Trust, through the Probate process, or outside of either of these processes altogether. In these cases, it is especially important to consult a competent attorney.

When potential beneficiaries or heirs have disputes over the administration of an Estate, the adjudication of those disputes is generally referred to as Probate Litigation or Trust Litigation.

Understanding the complex legal issues associated with Estate Administration, Trusts, Probate, and the differences between the various forms of Estate Administration is an important part of our practice at the Gunderson Law Group. If you have questions about these types of issues, or if you think you may need to begin the Estate Administration process, please contact our firm.

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Trust Administration

Trust Administration refers to the process in which a Trustee acts to manage and administer the assets held in a trust. Trust Administration does not usually require court involvement. This is one of the many reasons that people prefer trust administration over probate. The typical lack of judicial oversight, however, does not mean that there are no rules or formal requirements associated with Trust Administration. Trustees are bound by certain legal duties and obligations, and must administer the trust according to the terms of the Trust Agreement, and while observing all of the legal duties and obligations of a Trustee.

Typically, a Trustee is required to take an inventory of trust assets and provide an accounting of those assets to the trust’s beneficiaries. The Trustee is also generally responsible filing tax returns and ensuring taxes are paid on any Trust income. Additionally, Trustees are generally expected to observe duties of loyalty, duties of care, duties not to engage in self-dealing and others.

The Trust Agreement itself may also impose additional responsibilities. For example, Trustees are sometimes expected to manage trust assets in order to maximize growth of those assets. In other instances, a Trustee might be expected to manage and invest trust assets in a way that maximizes monthly income, and then distribute that income to the Trust’s beneficiaries on a regular basis.

Sometimes a Trustee’s duties will be carefully spelled out in the Trust Agreement. Sometimes the Trust Agreement is vague and requires some interpretation. Throughout the Trust Administration process, it is important that both the Trustee and the trust’s beneficiaries understand the rules and priorities under which Trust is administered.

If you have been appointed Trustee of a trust, or if you are the beneficiary of a trust and want to better understand the role of the Trustee, or any other aspect of the Trust Administration process, you should contact an the experienced Trust Administration Attorneys at the Gunderson Law Group.

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Probate Administration

Probate is the judicial process through which the affairs of a deceased person (the decedent) are administered and finalized.

One of the key functions of the probate process is to distribute a decedent’s assets. If the decedent left a Will, and if the court determines that the Will is valid, the Will serves as the set of instructions to the probate court on how to administer the decedent’s estate. Often this includes a designation of who should serve as the Personal Representative of the Estate and an explanation of who should inherit certain property. If the decedent did not leave a valid will, the decedent is said to have died “intestate.” In these cases, the probate court will administer the estate according to a set of default rules which are set forth in Arizona’s rules of intestacy.

Another key function of the probate process is to adjudicate creditor claims. This requires notifying the decedent’s creditors, determining which creditors’ claims are valid, allocating estate resources to pay the valid claims, and ultimately barring any future creditor claims against the estate.

Arizona probate law allows for both formal and informal probate—with varying levels of court involvement. In some cases, where the size of the estate is relatively small, probate can be avoided altogether and a decedent’s assets can be distributed through a Small Estate Affidavit.

Whether you need assistance in opening a probate case, or if you have questions about whether or not your situation even requires probate, or you are already involved in a probate proceeding and need additional help, the Arizona Probate Attorneys at the Gunderson Law Group are available to assist.

Trust and Probate Litigation

Unfortunately, when a person dies, it is not always clear what is supposed to happen with that person’s estate. Disputes can arise over the interpretation of a Will or Trust Agreement. Sometimes there are disputes over the value of certain assets or the applicability of certain laws. When these disputes cannot be easily resolved between the disagreeing parties, it is sometimes necessary to involve the courts and enter into litigation proceedings.

Litigation over Estate, Probate, and Trust issues usually takes place before a probate judge or commissioner. Unlike some other states whose probate courts operate independently from the state’s other court system, Arizona probate hearings operate within the Superior Court system. In some counties (like Maricopa and Pima), only certain Superior Court judges or commissioners are designated to hear probate cases. Probate hearings are also subject to a unique set of rules called the Arizona Rules of Probate Procedure.

The Trust and Probate attorneys at the Gunderson Law Group are familiar with the unique aspects of probate court and are experienced with the nuanced legal issues involving Probate, Trusts, and Estates. We also have significant experience in litigating these issues in court.